June 23, 2015

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Are You at Risk for Unemployment Identity Theft?

Wherever there are funds that can be stolen, identity thieves are likely to be at work. It turns out that unemployment benefits are no exception.

In the latest twist on information fraud, thieves are using identity theft tactics to fool state unemployment offices into sending them payments. According to CNN, the priority is for states to get that money out quickly, so they don’t wait for an employer to verify the identity of the person who’s applied for benefits online.

Signs of Theft

Much like medical identity theft or tax return fraud, you may not find out about the theft associated with unemployment fraud until much later — sometimes, even years down the road.

Some people discover they’ve been victims of unemployment identity theft only when the time comes to file their own claims. That’s when they might be rejected because whoever used the identity to collect benefits “maxed out” the available unemployment funds.

Other times, your employer may be notified that you’re receiving benefits, prompting a tangle of confusion and paperwork that can impact your credit health and even future job prospects.

Additional signs that you may have been affected include:

  • Requests for information from your state’s unemployment office
  • Loan rejections based on your employment status
  • IRS letters about underreporting of benefits you’ve supposedly received

How to Protect Yourself

To prevent this type of fraud, it’s important to take a proactive approach. Consider these strategies:

  • Stay on top of news about unemployment fraud in your state; thieves often draw benefits using numerous identities, leading to a spike in activity.
  • Guard your Social Security number, as this is the most important piece of information that thieves need. Give out the number only when absolutely necessary (don’t enter it on forms unless you know how that paperwork will be used) and don’t carry your Social Security card with you.
  • Don’t put your birthdate on social media. It’s fine to announce it’s your birthday, but sharing your exact age gives thieves another piece of useful information.
  • When using public Wi-Fi, don’t visit any sites that require a user name and password, and especially don’t visit sites with information like health insurance data, banking and credit card numbers, or credit report results.

If you suspect that you may be a victim of unemployment identity theft, report the crime immediately. The U.S. Department of Labor lists state websites and tip hotlines for reporting unemployment fraud. Acting quickly can stop improper payments and also creates a record of your efforts to shut down the theft. If possible, work with your company’s HR department to verify your employment files are accurate once the theft has been handled.

By staying vigilant and reporting any suspicious activity in a timely manner, you can help keep unemployment identity theft from compromising your personal information.

Image courtesy of Flickr user Got Credit.

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Heidi Daitch

Director, Strategic Programs at IdentityForce
Heidi is a busy working mom who juggles many of the same responsibilities and challenges at home and at work - a long list of things to do and not enough time to do everything. With so little time, Heidi tries hard to find simple, but effective strategies to save time for what’s really important – spending time with her family.
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